The number of orders that will be submitted each year for raw material is given by which formula?
A)Economic order quantity ´ order point
B)Total annual material needs/economic order quantity
C)Order point/economic order quantity
D)Total annual material needs/safety stock

Question

Quizplus · Accepted Answer

The formula for calculating the number of orders to be submitted each year for raw material is Total annual material needs/economic order quantity. This formula considers the total material requirement for the year and the economic order quantity which indicates the optimal order size that minimizes the total cost of ordering and carrying inventory. Therefore, option B is the correct choice.

The Number of Orders That Will Be Submitted Each Year